As a result of a change in government leadership and recently signed laws and treaties, companies in Mexico now have an important “to do” for 2019: prepare to review any unions that are “on the books” and assess compliance in this new environment.

What are “White Unions”?

White Unions in Mexico are usually employer-friendly unions that — due to current legislation deficiencies — can effectively bar entry of other unions who might otherwise attempt to gain a foothold in the workplace. They have little to no actual membership and do not actively represent workers. Historically, any union could petition for unionization without the need to prove the support of workers.

Government contractors are familiar with the obligation to retain minority or women-owned businesses as subcontractors to obtain government work. Increasingly, apex private sector businesses require participation by minority or women-owned businesses as a condition of obtaining work, as well.

A recent decision by the federal court for the Southern District of New York is a cautionary tale, and highlights the care required when terminating a minority business enterprise (MBE) sub-contractor. Annuity Funds Operating Engineers Local 15 v. Tightseal, No. 17-CV-3670 (S.D.N.Y. August 14, 2018).

Today, an estimated 40 million people are living in modern day slavery—including an estimated 16 million individuals in forced labor across global supply chains.

Given the importance of this issue, we are proud to introduce a new publication, Eradicating Slavery: A Guide for CEOs. Prepared by the B Team in partnership with Baker McKenzie, this guide provides practical guidance and examples of successful collaboration among companies to help end modern slavery.

While there’s been increasing concern and interest from business around tackling modern slavery, to date corporate leaders have been unsuccessful in meaningfully moving the needle to end this horrific practice. The B Team’s Guide seeks to help the private sector understand its responsibility and power in making a real impact on this issue and bringing freedom to those who need it most.

In recent years, joint employer liability has emerged as a persistent threat for companies who use franchise business models. Franchisors are increasingly facing claims brought by employees of franchisees for entitlements flowing from their employment. The outcome in these cases is unpredictable because the law is undergoing change. As such, the joint employer aspects of franchising arrangements can prove to be a minefield for the unwary and are a growing global concern.

Click here to read the full article (originally published in the September 2018 edition of Franchising World), which covers key developments in joint employer liability for franchisors operating in Australia, Canada and Mexico and describes a proactive approach to help mitigate risk.

On April 30, the California Supreme Court issued an opinion radically changing the legal landscape for any company engaging independent contractors in California. Dynamex Operations West Inc. v. The Superior Court of Los Angeles County changes the legal test for determining whether workers should be classified as employees or as independent contractors under California’s wage orders. The Court scrapped the multifactor, flexible test (known as “Borello”) that has been used in California for decades. It adopted the “ABC” test, a standard that has its roots in determination of unemployment tax status in other states and presumes workers are employees instead of independent contractors.

This extraordinary decision will have far-reaching consequences for California companies reliant on independent contractors and likely spur a landslide of litigation for years to come. As such, we are recommending that companies engaging independent contractors in California, in any industry, work with counsel to revisit classification decisions and undertake a cost/benefit analysis of reclassifying workers in the near term.

The NLRB’s roller coaster ride that is its joint employer standard took another sharp turn Monday, when the Board unanimously agreed to vacate its recent employer-friendly joint employer decision and to restore the joint employer standard adopted in Browning-Ferris.

On February 8, 2018, in what is believed to be the first time a gig economy case has been fully decided on the merits, a California federal judge ruled in favored in favor of the company and held that the delivery driver was properly classified as an independent contractor.

The opinion of US Magistrate Judge Jacqueline Scott Corley states that “[a]fter considering all of the Borello factors as a whole in light of the trial record, the Court finds that Grubhub has satisfied its burden of showing that Mr. Lawson was properly classified as an independent contractor.”

In rejecting the driver’s claim that he was actually an employee entitled to minimum wage, overtime and other benefits associated with employee status, the Court awarded the gig economy a significant victory.

ABOUT BAKER & MCKENZIE

Founded in 1949, Baker McKenzie advises many of the world’s most dynamic and successful business organizations through more than 4,100 locally qualified lawyers and 6,000 professional staff in 77 offices in 47 countries. The Firm is known for its global perspective, deep understanding of the local language and culture of business, uncompromising commitment to excellence, and world-class fluency in its client service. For more information: www.bakermckenzie.com